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Plea Deal Sticks in Securities Fraud Case, Appeals Court Rules

Sept. 16, 2013 – James Hudson lied to induce victims to give him substantial amounts of money for his country music career. Now, Hudson will be singing the blues in prison, as a state appeals court upheld a plea deal that puts Hudson behind bars for six years.

The state charged Hudson with six felonies after learning he duped 11 victims out of more than $350,000. He had obtained these loans by promising big returns on the investment. He promised one victim a 300 percent return on a loan of $100,000.

Hudson was charged with three counts of felony theft by fraud, and three counts of making false statements in connection with the sale of securities. He offered to make a “no contest” plea on two counts, and the state let him choose the two counts.

He chose two securities fraud counts, which carried maximum prison terms of six years. The court conducted a full plea colloquy and Hudson waived his rights to jury trial.

Attached documents explained the elements the state would have to prove to convict Hudson, including the requirement of showing the sale of a “security.” The document referenced statutes and case law to determine what a “security” is under Wisconsin law.

Hudson was sentenced to six years in prison, with six years extended supervision. The court also ordered Hudson to pay restitution to the victims. Hudson later moved to withdraw his plea, arguing the loans at issue were not “securities,” as a matter of law.

He also argued that prosecutors gave him inadequate definitions of a “security,” so he was not fully informed, and there was an insufficient factual basis to support the plea.

But in State v. Hudson, 2012AP2188-CR (Sept. 10, 2013), a three-judge panel ruled that there was a sufficient factual basis to determine that Hudson procured “securities” in the form of investment contracts, and he had enough information to make the plea.

“[T]he jury instruction attached to Hudson’s guilty-plea-questionnaire-and-waiver-of-rights form fully presented the required information as well as giving guideposts as to where additional information might be had if Hudson had any questions,” wrote Judge Ralph Adam Fine, also rejecting Hudson’s ineffective assistance of counsel claim.

“Hudson has not shown the need for a postconviction hearing in connection with his post-sentencing claim that his lawyer let him down by not giving him constitutionally effective representation,” Judge Fine wrote.